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Capital Corp may sue rumourmongers

Nigel Cope City Correspondent
Monday 18 August 1997 23:02 BST
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Capital Corporation, the troubled casinos group, said yesterday it was considering legal action against a group of people it claims have been spreading damaging accusations about the company.

The company went on the offensive after a steady stream of accusations, which have included allegations that Alan Hearn and Garry Nesbitt, the chief executive and former chairman, failed to inform the rest of the board about an offer for the group and that the board removed a profits warning from its interim results last September.

The company said yesterday: "We recognise that there has been a concerted campaign by various undeclared parties to link activities, both factual and fanciful, of the past management to the present management team.

"We are currently exploring the credentials and motivation of those who we suspect instigated the campaign and are determining whether it is in the company's best interests to take action."

The company said the board was taking the issues seriously and that the current board was right for the company. Garry Nesbitt has stepped back from the chairman position but remains a non-executive director. Alan Hearn was appointed as chief executive last autumn.

The company admitted that investors must be concerned about recent developments but said it had received no calls from institutional investors in the last few days.

Analysts believe the Gaming Board, which regulates the casinos industry, will be forced to take a look at the company even though it endorsed the group's controls in the recent Monopolies and Mergers Commission report on the pounds 192m bid for Capital by London Club's International. The bid was blocked by the government on competition grounds earlier this month.

The Stock Exchange and the Department of Trade and Industry may also look at the group's affairs though both refused to comment yesterday on whether they will mount an investigation.

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